Maersk sells its Brazilian cabotage subsidiary Mercosul Line

AP Moller-Maersk sells its Brazilian cabotage subsidiary Mercosul Line in attempt to obtain regulatory approval for the acquisition of German container carrier Hamburg Sud. Hamburg Sud has its own East Coast South America (ECSA) cabotage and feeder subsidiary in Alianca Navegacao, which probably merged with Mercosul Line will control 80% market share from ECSA cabotage and coastal market. This was the reason for decision of the Danish shipping conglomerate, which seeks for approval by the Brazil’s Administrative Council for Economic Defense, which likely will opposite the Maersk Line acquisition.

“With the purpose of securing the Brazilian competition authorities’ (CADE) swift approval of the Hamburg Sud acquisition, it has been decided to divest Mercosul Line from A.P. Moller–Maersk”, said the official statement of Maersk Line. “The divestment will ensure that the cabotage sector in Brazil remains competitive and that customers can benefit from a comprehensive choice of carriers”, adds the statement.

Currently, Alianca Navegacao controls 59% of the ECSA cabotage and coastal market, while Mercosul Line keeps about 21%. The remaining share is controlled by the companies’ competitor Log-In Logística Intermodal.

Among possible buyers for Mercosul Line are Hapag-Lloyd, CMA CGM and MSC, which are considered as favourites. NYK Line and Cosco Shipping are also thought to be interested.

The winned in bidding for Mercosul Line will acquire four boxships with capacity 2,500 TEU and 368 plugs for refrigerated containers. Most importantly, they would gain access to a Brazilian flag, which would allow them to operate along the Brazilian and Mercosur coastline.